Non-Tax Revenue Development

Fiscal Year 2012 Non-Tax Revenue Assumptions

The Commonwealth collects and receives revenues from several non-tax sources,
including the federal government, various fees, fines, court revenues,
assessments, reimbursements, interest earnings and transfers from non-budgeted
funds. These revenues are deposited in the General Fund, the Commonwealth
Transportation Fund and other operating budgeted funds. The Governor’s fiscal year
2012 budget recommendation assumes approximately $12.65 billion in non-tax
revenues. Reimbursements from the federal government make up 62% of the Commonwealth’s
non-tax revenue. The remaining non-tax revenues come from departmental
revenues (23%) and operating transfers to fund programs and services off budget
(15%). Sections 1B and 1C of this document details the different types of
non-tax revenues.

House 1 Total Non-Tax Revenues: $12.647 Billion (in
$ Billions)

Federal Revenues

Federal
revenues are collected through reimbursements for the federal share of
entitlement programs such as Medicaid and through block grants for programs
such as Temporary Assistance for Needy Families (TANF) and Child Support
Enforcement. The amount of federal reimbursements to be received is determined
by state expenditures and federal regulations that govern federal programs. Staff
from the Executive Office for Administration and Finance work with agencies to
project budget year spending levels for these federally supported programs.

Departmental Revenues

Departmental
revenues are derived from licenses, tuition, fees for programs and services,
reimbursements and assessments for services including, but not limited to,
revenues from the Registry of Motor Vehicles, reimbursement of healthcare costs
from municipalities participating in the state’s Group Insurance Commission
(GIC) health care programs, drug rebate money received by the Executive Office
of Health and Human Services, interest earnings received on the state’s
budgeted fund balances and fees collected by the Secretary of State’s Office. To
the extent possible, the Administration has minimized fee increases. However, MGL
Chapter 7 Section 3B
provides for an annual review of fees to confirm that they are sufficient to
defray the cost of providing the service. As part of this exercise, the
Executive Office for Administration and Finance analyzes historical non-tax
revenue receipts and works with agencies to develop budget-year projections for
these revenues. During the budget process, agencies are asked to review the
fees to ensure they are current and reflect the actual cost of doing business.

As
mentioned above, H.1 includes two sections that give a detailed overview of
projected non-tax revenue for fiscal year 2012. Section 1B details projected
fiscal year 2012 non-tax revenue receipts by the department, board, commission
or institution that administers and collects the respective revenue source. The
online version of H.1 allows the user to further examine each governmental area
and view a title and description of each revenue source contributing to that
area’s total non-tax revenue. Additionally, the fund statements which are
included in the “Financial Statements” section of the budget document offer
another view of departmental revenues by operating fund.

Consolidated Transfers

Consolidated
transfers reflect inflows to the General Fund from non-budgeted funds which
include annual tobacco settlement proceeds received as part of the Master
Settlement Agreement with tobacco companies, net revenues from the State
Lottery Fund, fringe revenue to recoup the cost of various statewide benefits
assessed on non-budgeted funds and revenues from the Commonwealth’s Abandoned
Property Division. The Executive Office for Administration and Finance
solicits agency feedback and uses historical data to project transfers to and
from the budgeted funds for the proposed budget year. Section 1C of this
document provides further detail behind this revenue type.